Extract B: Structural transitions and export strategy in Vietnam

Vietnam has emerged as a major manufacturing powerhouse in Southeast Asia, transitioning away from low-productivity agriculture toward high-tech electronics and components assembly. To move up the global value chain, the government has implemented targeted industrial policies, including corporate tax holidays, direct export subsidies, and credit guarantees for domestic firms in the semiconductor and green-energy sectors. Critics argue these policies strain the national budget and risk international trade disputes, but supporters maintain that these fiscal measures are crucial to help infant domestic firms achieve the scale needed to compete with established global multinational corporations from the US, Taiwan, and South Korea, thereby driving long-run economic expansion.